short-term thinking is causing long-term economic harm. you will be tustuck with a masse bill. the u.s. trust is eroding quickly. big business speaking with one voice. you shouldn't use the threat of causing the u.s. to fail on the obligations to repay it's debt. >> both sides deserve a spanking for this. >> small business is questioning it as well. >> over and over they say why is this happening. the administration saying borrowing costs for mortgages and student loans rise. >> and the world watching and warning. >> if there was a -- lifting the

debt ceiling what is new recovery could turn into a recession. >> on the right, a handful of debt default deniers. >> i think this is the 11th time i have been through this discussion of the sky is falling and the earth will erupt. >> and florida republican insisting not lifting the debt ceiling would quote bring stabtility to the markets. fact forecasts are often wrong but is it a risk worth taking? and that is your money that they are risking. never forget that. fareed zacaria is with us.

>> let's be honest. the american system is designed to allow for easy gridlock. the founding fathers created a system fearing this. there are lots of different ways to veto stuff. i think that is part of the issue but really what is at work here is something much more dangerous. here we are getting into an, anti-democratic process. if you want to repeal obama care great, go for it. >> if you want to cut government spending that's great there is a procedure. what is happening here is because the tea party does not have the senate. what it is trying to do is extortion which is to say we

will block everything if you don't give us this which we know we couldn't get through the democratic process normally. >> so when the number one concern near term and long-term concern should be about jobs, a new poll is showing that it is dysfunctional government, things have changed here. >> i was talking about investors. when they are worried about indonesia or banana republics we need to worry about political risk is the united states of america there is no question that we would pay our bills.

from the testimony of secretary lew this week. i want you to listen to something that a republican senator said to him. >> the government keeps growing and growing and growing. there are more people in the wagon and more people in the wagon and less people in it. this is the makers and takers argument. president obama won the elotion. it has come back around. is that at the core of this debate here? you know it is at the core and it is part of the problem. by which i mean to say again, if you feel that way, it gets people off medicare and medicaid

get it passed. that is the way you deal with this. you don't do it by extortion. but there is a broader issue here which is, it seems to me that if that is the case, does a government that is dysfunctional, i don't understand how burning down the house helps you make that case. you look at this picture and it is counter productive to be fighting at home. it was a successful move because the president can't be there they sent their president and

prime minister and they were making hey while we are away. it is unfortunate. a lot has been made of the tea party. saying changing the script from obama care to balancing the budget. but should the president be showing a better kind of leadership? >> i don't believe so. what is meant to say it is a plague on both of your houses. the president is standing firm on a core consti tootutionconst principle. part of a democracy is if there is a process in place that is democratic and constitutional you accept the outcome. whether it is your guy who one or the other guy you accept it. that core principle is at the heart of our democracy. if the process worked, obama

care was passed by the house and senate, the congress passed a budget the same way you have to live with that and if you want to change it, change it using the same process. don't take hostages. up next find out why mike ditka claims the biggest mistake of his life is president's gain.

mike ditka not running was the biggest mistake that he had made. >> protesters in washington and at away games want the name and the logo dropped. the real owner said he is not a label and continues to be a

badge of honor. some $145 million by forbes and the partial government shut down shutting down safety. the san francisco 49ers player trying to change his name in protest to an nfl hit he took. he twited "damn government shout down lol". expectations so low for some grown up behavior. the talk of talking sent stocks way higher on thursday. what now? be brave and ride it out? fantastic stock market gains here. they have good 401(k) returns.

s&p 500 up 18% matt, what do we do now? >> you either want to buy or sell. i'm going to say sit there on your hands. take a break and do not make an emotional decision. those gains are great and people do not want to lose them. they thought okay i'm happy with an 18% gain this year. don't just do something stand there. sometimes that is the best advice. if you had sold stomacks last week. you would have lost the biggest rally. so yes, you don't want to miss out on that big day. they are buying friday 300 points higher. this week the secretary told the finance committee that this is

unthinkable what we are facing here. >> there is a parlor sport in washington. when is the last minute? you can't do that. when you have done that with the debt limit it is reckless. >> is this something that investors are going to have to get used to? >> i think so. look back in history over the last couple of years. we had the fiscal cliff coming in 2012. we had the s&p downgrade. so we have seen this in the past. every crisis that we have had within a few weeks to a month we have had a rally with that. the fed is the only one operating here. i think the fed affected that chart but i believe that people

when they invest they invest for earnings and the problem most make is that they are basing their investments on the short-term events. >> what if you have nice double digit returns this year in your stock portfolio. do you think this is a time for people to look at the stocks and bonds and make some changes right now? >> i don't disagree with that completely but i do for a point. at the end of that bull market you have big gains. so it is not too late for me. you are never going to pick the top. you mentioned a keyword there. the fed. do you think the med is fed is o stop pumping it in there? the tapering will not begin

until 2014. with that being said we have higher stocks. up next love american style. why the drama in dc is looking like a failing marriage. can it be saved? >> last week we talked to a hostage ne negotiator.

remember the economic crisis? the economy was in free fall the stocks tumbling and millions more will lose their jobs. this week consumer confidence since then. about three times as many people say the economy is in poor shape as those who say it is doing well. they feel the same way 19% of the time at work. there will be no women at twitters board of directors. all 7 members are male. google microsoft and amazon are

the companies that lead with at least one female board members. starbucks giving away one cup of coffee. ceo howard schultz saying americans need to come together in these challenging times. the new look includes a 3d ribbon and colored ink. food a developer at the south by southwest e krxt oco. jet blue starts allowing families to pool their frequent flier miles. and letting customers decide who qualify qualifies for diskoucoundiscoun.

>> i am the one who found this house i bought everything in it. >> with my money. it is a lot easier to spend. >> not exactly the war of the roses but the big talk name calling and mud slinging on capitol hill can sound like a bad marriage headed for divorce. >> a lot of americans can relate to this christine.

that maybe reagan had with tip o'neill. he's not good at the small talk and the chit-chat. the how was your day dear stuff. you take john boehner who is having a hard time choosing between confrontation and his new marriage. let's talk about it, the affordable care act, it has been law for a few years and now it stands to make him a star.

>> couples who argue about finances are more than 30% likely to divorce than couples who argue once in a while. this is all about money and how to spend it and prioritiy ies i the household. >> you think it is about money christine. it is about power and having a voice. money is just the convenience m metaphor. this going back to 2011 with the grand bargain that didn't happen. now the problem is, these two are for getting about the rest of their children which are us. the american people. they have to present the unify d

front and they have to start to think about the rest of the children in their family. that is what saves marriages. >> sometimes it looks like they are fighting about one thing and they are fighting about something else. fighting about obama care now and then about the budget. that happens in couples too. >> it is called flooding. once water goes under the bridge you can't bring it up again. as i said. you have to look for what are the under lying issues. we use money and sex as our fighting thing its in relationships. but the truth is it is always about power and compromise. what they can accomplish together is so much greater than what either can do together. they are both there we need to have the republicans as a watch dog and we need to have the

president making the signature legislations and we need to get along so that the rest of the family can grow and thrive. >> if yyou have to have your 30 second session what would you tell them? >> well you know obama tried to call a meeting with all of congress and john boehner held back and only let 20 of them go. they need to go goelfing togethr and they need to hang out and have a beer and not talk about anything else but each other. >> this is a fun metaphor to explore. nice to see you too. >> up next, can this recovery

withstand the government shut down. is this the time for austerity in america? we'll take a look next. ♪

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fixodent, and forget it. after the rally, both sides are finally talking.

candy crawley is our correspondent and he is a world-renowned expert. certainly we can say in the short run it doesn't take a genius to know this has hurt the republican brand greatly. do i know what will live into 2016 to affect the next presidential election? i don't know because it is a long time between now and then. if that goes well, it is a huge

slapdown. >> you saw the poll numbers falling. you saw consumer confidence, can this recovery withstand a government shut down and a sequester and assuming you get over this debt ceiling drama and you go into a budget process? is this the time for austerity in america? >> it is clearly not. we need to balance the budget over the long run and focus with the unemployment and there are things that we should be doing where we should be spending more. the thing that concerns me most

is an effort to dim in issue the presidency. we are going to put a six week extension and it is no way to run your country. >> the meetings in washington. what is the rest of the world saying about how we are running your country. well, on the one hand they are terrified and on the other hand they don't believe it. i don't think anybody things that treasury bills won't get paid and probably even social security checks won't get paid. the imf, they are worse than we are. >> candy, president obama won the election, but the makers versus takers argument is back again. only now it is the wagon pullers versus the wagon riders. >> the government keeps growing

and growing and growing and when it grows that means it is more people in the wagon and less people in the wagon. you are talking about budgets and priorities of this government. that is going to be at the core of the fighting between the republicans. >> republicans do see this as an aging population looking for the services that an aging population has seen as theirs which is social security and medicare. they see more and more people that are going to join into obama care which will cost the government more money. so they see a worker problem and the need for government is getting bigger. so it is not just that old mitt romney 47% argument. it is also about the others.

>> the only action is coming from the federal reserve. the president, and the current chairman bengha bernanke -- doe she bring anything to the table? >> i think she is a creative and tough person. i think she is good now in the seps that she clearly cares a lot about employment and i think this is a point where the feds bias ought to lean that way. but she can't solve the problems this warfare this constitutional battle. i think the fed needs to step back but it can't cover up problems. there is no way that the fed can cover up the stimulus. if you have this kind of stuff

going on? >> well, christine, there might not be bonds for them to buy. but with the debt ceiling yeah, they aren't going to do anything in the middle. they don't have data to go on. because the labor statistics aren't coming out. a world without economic data is a dark, dark place. thank you so much. >> nice to see you. coming up on this edition only like aich regard can. >> as the spending continues eventually the government will reach the legal limit of its authority to borrow. >> the global reaction next. an irregular heartbeat, not caused by a heart valve problem. that puts jim at a greater risk of stroke. for years, jim's medicine tied him to a monthly trip to the clinic to get his blood tested.

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welcome back to this emergency edition of "your money". look at this. $16 trillion and change. that is the totally outstanding debt of the united states. the maximum allowed by law. if you stacked up what america owes in dollar bills it would reach to the muoon and back neverly five times. who are america's bankers. you and me. this includes americans who buy savings bonds. foreign governments hold a third of the debt. china the biggest foreign holder

of u.s. debt. finally the u.s. government owns the rest. think of it as keeping the money it takes out of your paycheck safe. requirement funds are includes in that. now tea party republican ares call this spending money we don't have on things we don't need. we have bought in richard to explain what the u.s. finances what is the largest business in the world, the united states economy. >> you have to bear in mind that all governments of every complexion need to borrow money. there is nothing obscene or unusual about that. and the united states has borrowed more than most but it

is a very sizable economy. what is different in the u.s. to other countries is the way you go through this annual or biannual or every now and again business of having to decide when you can borrow more and that is the problem. >> round and round every few years the u.s. government goes into battle over the debt ceiling. the essential law needed so that the government can keep borrowing more money. because day-by-day step by step the u.s. has to keep borrowing to keep the government open sometimes the u.s. government goes through $60 billion in a day. the money goes far and wide paying for government workers infrastructure even interest on

existing debt. all this costs washington money. as the spending continues, eventually the government will reach the legal limit of its authority to borrow. it has reached the debt ceiling and unless the ceiling is raised. the options range from nazi sty disastrous. decisions have to be taken. there can be instant austerity and whole spending as existing levels. that would push the u.s. and the world economy towards recession. and then there is robbing peter to pay paul. prioritizing technically very difficult. and there is always default. >> catastrophe sending confidence in the economy

tumbling down. because there is so much debt any form of default would have terrible consequences for the markets. the only thing that is certain is that it would take years to clear up the mess and chaos. and of course the thing one has to remember in all of this even if the worst-case scenario does not arrive, the sheer drip drip drip effect eventually creates a lack of confidence, consumers stop spending and foreign governments become carry and that can have a damaging effect. >> we have been talking about debt and deficits for years. in good times you started to hear 2005, 2006, 2007 making sure that we had long-term

priori priorities by lowering our debt to more sustainable levels. and then the crisis happened and now is the moment that it has come back this austerity is back and what the republicans say is that this congress has never done it. they have never tightened their belt ever. so they are going to do it. is that the right approach? well, you have -- you are talking about the difference. let's get into the weeds of budget stuff. you are talking about the structural deficit. you have to spend higher unemployment benefits and it is the structural deficit that is

of more concern. europe is having to deal with the deficit as other countries around the world. that is the bit that even in good times you are spending too much. health care social security and all sorts of benefits. and that is the bit that the u.s. is concerned it has to address the long-term old age pension. that is the hardest thing to tackle. because everything has a constituent who is grandma or using medicare and special security. is there any risk that the world would stop lending money to the united states or slow that pace? absolutely possibly maybe thinking about it on reflection no. >> richa arrichard, thank you s.

>> all right. coming up. >> there is zero chance that the u.s. government is going to default on its debt. >> we are a long long ways from that. >> we go inside the minlds ds oe debt ceiling deniers. that is next. i get 2x the thankyou points on each ticket. the citi thankyou preferred card. now earn 2x the points on entertainment, with no annual fee. go to citi.com/thankyoucards so she could take her dream to the next level. so we talked about her options. her valuable assets were staying. and selling her car wouldn't fly. we helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today... and tomorrow. so let's see what we can do about that... remodel. motorcycle. [ female announcer ] some questions take more than a bank. they take a banker. make a my financial priorities appointment today. because when people talk, great things happen.

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the repairs are guaranteed for life. so call... to talk with an insurance expert about everything that comes standard with our base auto policy. and if you switch, you could save up to $423. liberty mutual insurance -- responsibility. what's your policy? >> it simply says you pay for what congress has already authorized america to purchase. >> when it comes to the debt limit, i agree with the president. we should pay our bills. >> big business, economists, democrats, some republicans, even china agree the u.s. could not default on its debt. warns of a worldwide shock. despite all of that, 38% of the americans say not raising the debt ceiling would be a good thing. and it's an idea that's getting

support from some lawmakers in washington. >> all of this talk about a default has been a lot of demagoguery. . >> here's a thick that all the media does. default equals not raising the debt ceiling. that's not true. >> we are not going to default from the public dead. but that doesn't mean we have to pay every bill that comes in. >> lots of decisions about how to prioritize spending. there's plenty of casual flow to pay interest payments come october 17th. >> even if the treasury could work through the legal and technical issues, the u.s. would still be breaking promises to paf its bills. breaking promises on contracts with small business lsz. governor, this debt ceiling fight has really taken the business commune tip -- it's made it very concerned. i mean, across the board.

trade asoeszuations, big and small businesses alike. all kinds of different companies saying stop this madness. even talking about a default is just showing -- it's setting a terrible example. we koent run a country like this. >> happy hall weenl. i don't know what else to say. it is a retched place in which the country finds itself. yesterday, i testified in front of the senate banking committee. both democrats and republicans agreed. default is over the cliff. default could put us back in the recession. or the other person says we're not ready to talk about entitlement reform. so what i'm seeing today, if that's true, and maybe tomorrow or the next day, is that we'll have a plan to address

sbietslements. but these people are not paid as democrats or republicans. they're paid as american citizens representing us. and they need to get their act together. >> it's swresing. some trade associations are talking about primary campaigns. i think that's interesting. you could see mainstream republicans going forwards. what do you think about that? >> well, that will happen. how much and how effective it will be and houngd it will last, who knows. but the problem with my party, we think we are all conservative and we're care vl. the truth is from 1789 to 2000 to amass a 5 trillion dollar debt. now, in agt years of george w, that p that doubled to ten.

both repushily cans and democrats, this has to end. there has to be rong term entitlement reform. this is all a part of it. let's go. raise the debt ceiling. get our debt doub. down. >> is the gop still the party of business? that's my question. the way you're doing business is not good for any of us. it's not good for our earnings, na demand or the american people. >> two-thirds of new jobs are created wi small business. but the reality is you're elected to legislate to resolve the problems of the country.

recognize the fact that we're here and try to address the long-term problems. we have an awful lot of earnings po ten rnl. it's a delicate balance: it is. the chie needs are laughing at it. sq . >> nice to see you, thank you. >> all right, coming up. who's winning and who's losing in the debt showdown in washington. the answer may surprise you. iony and gifts store. anything we purchase for the paper cottage goes on our ink card. so you can manage your business expenses and access them online instantly with the game changing app from ink. we didn't get into business to spend time managing receipts, that's why we have ink. we like being in business because we like being creative, we like interacting with people. so you have time to focus on the things you love. ink from chase. so you can.

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wielcome back to this emergency edition of "your money." for example, the congressional gym is open, but the staff has been furloughed, which means members need to provide their own towels. >> the electricity, the hot water, the towels, they're not provided by gym fairies. they're provided by taxpayers. >> of course, if all you can do is latch at the government shutdown, look no further than miley cyrus.

sfiems, you really do have to just laugh. that's it for this emergency edition of "your money." some late nights ahead, it looks like. have a good weekend. >> hello, i'm in with the stories topping the news hour. just four days until we hit the debt ceiling deadline. and the pressure is now on the u.s. senate to come up with a deal. are high-level talks dealing any fruit? plus, anger over the government shut dounl boilsover in the streets of washington. >> protesters voice their frustration. and rater, two orthodox jew ish rabbis were accused of kipi